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Israel’s budget needs to enable the country to defend itself against new threats in the region, Prime Minister Benjamin Netanyahu said Wednesday at the opening of a cabinet meeting on the defense budget.

The debate centers on the Defense Ministry’s long-term fiscal plan, in the amount of billions of shekels for the next few years, amid wide-ranging budget cuts and tax hikes recently put forward by Netanyahu and Finance Minister Yuval Steinitz. Top finance and military leaders also attended the meeting.

“This is not only a discussion about budget priorities between the Defense Ministry and other ministries, but about priorities within the defense budget,” Netanyahu said. “Not down to the last penny, not within each individual section, but about the main questions regarding building the force related to the multi-year plan, for the next five years, perhaps the next decade.”

The budget battle is seen by some as a symbol of whether Israel will embark on a military strike against Iran, which is expected to cost tens of billions of shekels, according to a recent Haaretz report.

“This is a complex and serious discussion… We must finish it in order to move forward on the 2013 budget… to chart a path to the defense budget for the next five years, with consequences for the next decade,” the premier explained.

“We must be ready for the changing threats that are being directed at the State of Israel. We must see to it that the security which Israelis have enjoyed over past three and a half years continues under the changing conditions,” he added.

Kadima MK Yohanan Plesner took the opportunity to criticize the prime minister, saying his priorities do not lie with the people or social justice. He told Israel Radio that Netanyahu “says things, but doesn’t do them,” referring to the premier’s failure to pass a far-reaching universal conscription bill.

In an interview with Channel 2 Friday, Bank of Israel Governor Stanley Fischer confirmed that the country is preparing itself financially for a scenario in which Israel’s “security has been compromised.”

“The main responsibility of every country is to protect its security… and if more money needs to be taken out for the country to defend itself, then that’s what needs to be done,” he said.

Steinitz said during Thursday’s meeting that any funds the government allocates to the defense budget will come at the expense of health and education.

Steinitz said that there was an inherent tension between a country’s economy and its security needs. “Arab states have been cutting down on stockpiling weapons for years because of their economic situation,” he said.

According to the Finance Ministry, the Defense Ministry owes the national treasury NIS 11.4 billion for failing to reach its budget reduction goals.